Ludwig Beck am Rathauseck-Textilhaus Feldmeier AG

Quarterly Report • Apr 21, 2002

REPORT FOR THE FIRST 3 MONTHS OF 2002

Sales: Virtually constant despite adverse economic climate Earnings: Slight improvement Outlook: Sales and earnings forecast for 2002 confirmed – Further expansion of sales company – New »Fashion Warehouse Outlet«

WKN 519 990

ludwig Beck am Rathauseck – Textilhaus Feldmeier AG _ Marienplatz 11 _ 80331 Munich _ Telefon ++49 (89) 23 691-0 _ Telefax ++49 (89) 23 691-600 _ Info@ludwigbeck.de _ Internet: http://www.ludwigbeck.de

Key figures
		Jan. 1- March 31, 2002	Jan. 1- March 31, 2001
Gross sales (incl. VAT)	€ million	21.2	21.6
Net trading margin1)	€ million	8.2	8.7
Earnings before interest. taxes and depreciation (EBITDA)	€ million	0.0	0.3
Operating result (EBIT)	€ million	- 0.8	- 0.5
Net income HGB	€ million	- 0.2	- 0.6
Net income IAS	€ million	- 0.7	- 0.4
Earnings per share DVFA2)	€	- 0.06	- 0.11
Earnings per share IAS2)	€	- 0.21	0.12
Cash flow	€ million	- 0.7	0.1
Capital expenditures	€ million	1.2	0.5
Employees (as of March 31)3) Apprentices		572 87	627 81
Employees (weighted) Apprentices		452 44	467 40

1) Net sales minus material expenses

2) Outstanding shares 2001: 3.2 million: 2002: 3.12 million

3) Without apprentices

Balance Sheet
			March 31, 2002	March 31, 2001
ASSETS
A. FIXED ASSETS		€ million	78.6	78.2
B. CURRENT ASSETS		€ million	19.3	15.2
C. PREPAID EXPENSES		€ million	0.4	0.2
			98.4	93.6
SHAREHOLDERS' EQUITY AND LIABILITIES
A. SHAREHOLDERS' EQUITY		€ million	38.6	38.9
B. ACCRUALS		€ million	2.6	1.9
C. LIABILITIES		€ million	57.1	52.7
			98.4	93.6

Despite a noticeable deterioration in consumer spending, the Ludwig Beck Group succeeded in holding sales virtually constant in the first quarter of 2002. The slight loss is typical for first quarter earnings in the retail industry and well within our planning corridor. Additional revenues are expected to be generated, above all, by the new "Wellness" house and the promising expansion of the newly founded sales company (Vertriebs GmbH).

Sales In the first quarter of 2002 the Ludwig Beck Group was able to hold sales more or less steady, in spite of the continued downturn in the German economy. The Group's gross sales amounted to € 21.2 (prior year: € 21.6) million. This figure includes a first-time contribution of € 0.3 million by the Group's new sales company (Vertriebs GmbH), which started operations in late February. Despite the adverse economic climate and sluggish consumer spending, sales were fully in line with expectations.

Overall, sales of Ludwig Beck developed significantly better than the sector average: according to the trade magazine "TextilWirtschaft", total sales in the German retail clothing sector fell by an average of seven percent during the first three months. Key factors were consumer uncertainty in handling the new euro currency, the continuation of the economic downturn and a fall in employment following major company failures and the threat of strikes. Consumer confidence hit an all-time low.

Ludwig Beck was able to compensate for this fall in consumer spending, affecting virtually all product categories, with strong sales at its branch stores and the growth of its subsidiaries. ludwigbeck-online GmbH, for example, was able to boost online and mail order sales of classical and jazz records by 19% to € 0.100 (prior year: € 0.084) million. The newly founded Ludwig Beck Vertriebs GmbH opened its first S.Oliver store in Memmingen on February 28 and took

over two existing S.Oliver stores in central Regensburg as of March 1. The company made a very promising start with sales of € 0.3 million.

There was strong consumer interest in a clearance sale of underwear, prior to the expansion of our underwear house. The reconstruction measures will create a further 250 m2 of shopfloor space and improve access to the surrounding departments. The new space will be utilized by the cosmetics department – one of the store's strongest growth areas – which will open there in early September with new product lines and a small spa area. The underwear department will also be expanded and reorganized.

The number of employees (without apprentices) fell to 572 (627) by the end of the quarter, due mainly to a reduction in the use of temporary staff. On the basis of full-time employees, headcount fell by 3.2 percent to 452 (467). As of March 31, Ludwig Beck employed 87 (81) apprentices. The company's traditionally high emphasis on apprenticeships was honoured with the "Rudolf Egerer Award 2002", which Ludwig Beck received in recognition of its services to vocational training from the Bavarian Trade Associations.

Earnings Despite almost unchanged sales revenues, Ludwig Beck succeeded in improving earnings slightly during the period under review. The result from ordinary activities improved to € -0.2 (€ -0.6) million and was thus fully in line with expectations. Earnings in the retail sector are generally negative in the first three quarters as fixed costs are spread evenly throughout the year while sales are strongest in the last two quarters.

The consolidation of the Group's real estate activities and two once-only effects resulted in an overall positive contribution to earnings:

• In order to reduce processing time and costs for goods and make them available in stores more quickly, the Ludwig Beck Group will change its logistics processes as of July 1. Price labeling will be outsourced to a specialized service provider. This will result in the loss of 25 jobs. The works council has already approved a compensation package for those staff affected. A provision for expected total costs of € 0.4 million has also been formed in the balance sheet.

• The consolidation of the Group's real estate company, Ludwig Beck Beteiligungs GmbH, led to a reduction of € 0.5 million in other operating expenses. On balance, therefore, there will be a sustained improvement in EBIT in the current year, compared to the previous period. This is offset, however, by a contrary effect to the interest result of € 0.5 million, caused by the cost of financing company property. Due to the changed rental and financing structure, however, there will be strongly positive net benefits from the company's real estate activities in the medium term.
• Ludwig Beck AG has acquired existing debts of Feldmeier KG towards credit institutes. The difference between the nominal balance sheet value of the claims and their cash value (purchase price) resulted in a once-only consolidation profit of € 1.3 million in the HGB accounts (German Commercial Code). In total, the financial result improved to € 0.6 (€ -0.1) million as a result of this once-only effect.

Earnings are still burdened to a smaller extent by the planned start-up costs for subsidiaries Ludwig Beck Vertriebs GmbH (€ -0.1 million) and ludwigbeck-online GmbH (€ -0.1 million).

The reconciliation chart from HGB to IAS accounting methods produces a result after tax of € -0.7 million. The greatest difference between HGB and IAS accounting resulted from the onceonly effect of purchasing claims (neutralized under IAS accounting) as well as for deferred taxes. Loss carryforwards are treated by IAS as an asset. This asset is reduced by positive results and expanded by negative results.

The interim accounts were prepared in accordance with German Accounting Standard (DRS) No. 6. The same accounting and valuation methods were applied as for the consolidated annual financial statements for the fiscal year ending December 31, 2001. Earnings per share was calculated by dividing the quarterly result by the average weighted number of outstanding shares during the period. As of December 31, 2002 the entire consolidated accounting system will be changed completely to IAS methods.

Capital expenditures Capital expenditures in the first three months totalled € 1.2 (€ 0.5) million. Major investment projects were the establishment of the new sales company (store network), amounting to € 0.8 million, and the reconstruction work at the company's flagship store.

Outlook Following the extreme difficulties of the past year, the German retail clothing sector entered the current year in a much more subdued mood. The continued economic downturn, coupled with consumer uncertainty surrounding the introduction of the euro, have combined to dash any hopes of a rapid recovery in demand.

Ludwig Beck recognized this development at an early stage and has laid the foundation for further growth against the general sector trend. By entering the vertical sales channel business, we can leverage our know-how to generate additional sales and earnings potential. In 2002, Ludwig Beck Vertriebs GmbH plans to open six stores. On April 17, two further S.Oliver (260 m2 ) and Gerry Weber (300 m2) stores were opened in the "Regensburg Arcaden" shopping center. The planned doubling of floor space at our existing branch in Munich's Olympic Shopping Center will be used as a further site for a monolabel store. A new Esprit shop with 1,000 m2 of floor space will be opened in October.

The company intends to continue its expansion strategy – with strict adherence to investment budgets and constant monitoring of success – also in 2003. A total of at least ten further stores will be opened in Kempten, Landshut and

Munich-Riem. Ludwig Beck Vertriebs GmbH aims to focus primarily on shopping centers which offer a suitable infrastructure for several shops of different labels to be opened.

Ludwig Beck plans to add a further sales channel with the opening in July of its "Fashion Warehouse Outlet" in Munich-Parsdorf, which is attractively positioned next to a discount outlet of high-class food retailer "Feinkost Käfer". The "Fashion Warehouse Outlet" will allow the company to market excess stock more directly, quickly and profitably to a completely different target group than Ludwig Beck's traditional customers.

On the basis of the company's planned expansion and further cost-reduction measures, the Executive Board is confident that its target of growth well into double figures for consolidated earnings and a noticeable increase in sales will be achieved in fiscal 2002, aided by a recovery in the German economy in the second half of the year.

Munich, May 2002 The Executive Board

Income Statement of Ludwig Beck am Rathauseck – Textilhaus Feldmeier AG, Munich acc. to HGB
			Jan. 1-March 31, 2002 € million	Jan. 1-March 31, 2001 Mio. D € million
	1. Sales revenues - gross sales	21.2		21.6
	- minus VAT - net sales	2.9	18.3	3.0	18.6
	2. Other capitalized costs 3. Other operating income		0.0 0.7		0.0 0.4
			19.1		19.0
4.	Material expenses	10.1		9.9
5.	Personnel expenses	4.9		4.8
6.	Depreciation	0.8		0.7
7.	Other operating expenses	4.1	19.9	3.9	19.5
			- 0.8		- 0.5
8.	Financial result		0.6		- 0.1
	9. Results from ordinary activities		- 0.2		- 0.6
10.	Extraordinary result		0.0		0.0
11.	Taxes		0.0		0.0
12.	Net income		- 0.2		- 0.6
13.	Minority interests		0.1		0.0
14.	Net income after minority interests		- 0.3		- 0.6

Cash Flow Statement Ludwig Beck am Rathauseck – Textilhaus Feldmeier AG, Munich
	Ist Quarter 2002 € million	Ist Quarter 2001 € million
Net loss	-0.2	-0.6
Depreciation	0.8	0.7
Non-cash income	-1.3	0.0
Cash flow	-0.7	0.1
Increase in working capital	-3.6	-4.5
Net cash used for operating activities	-4.4	-4.4
Disbursements for
purchases of fixed assets	-1.2	-0.5
Net cash used for investing activities	-1.2	-0.5
Disbursements to/ contributions
of minority shareholders	-0.1	0.1
Increase in interest-bearing liabilities	6.9	5.5
Net cash provided by financing activities	6.8	5.6
Changes in cash funds	1.2	0.7
Cash, beginning of period	1.0	0.6
Cash, end of period	2.2	1.3

IAS reconciliation table
		Jan. 1-March 31, 2002	Jan. 1-March 31, 2001
Result acc. to HGB	€ million	- 0.2	- 0.6
Adjustments to IAS
Fixed assets	€ million	0.1	0.0
Own shares	€ million	- 0.1	0.0
Non-interest bearing liabilities	€ million	- 0.9	0.0
Deferred taxes	€ million	0.4	0.2
Result acc. to IAS	€ million	- 0.7	- 0.4

Segment Reporting
€ k	Ludwig Beck	online	Monolabel	Real Estate	Reconciliation	Group
Net sales	17,988	87	263	1,234		19,572
Inter-segment sales	- 56			- 1,188		- 1,244
Non-group sales	17,932	87	263	46		18,328
Segment result	- 1,479	- 49	- 105	131	1,332	- 170